Buying A Home

Summer is officially in full swing! With the shift towards people being on vacation, the ‘summer slowdown’ and changes in routine the real estate market tends to drop off slightly too. This month’s stats have shown that with most markets across the Fraser Valley transitioning into a “Balanced Market”.

*stats taken from the Fraser Valley SnapStats report

In addition to the above stats, a few other things to keep in mind include the year over year comparison.

Total listings were up from last with 5,490 homes on the market compared to 4,087 in 2017. However, the total sales were down with July 2018 coming in at 1,152 and July 2017 at 1,174. One interesting note (and good news for sellers) was the prices continue to be up from last year. The average home price was up 8% year over year, giving sellers a boost within the market.

If you have questions or would just like to get together and find out the stats for your area, please give me an email–it would be my pleasure to meet with you!

Everyone deserves a safe and affordable place to call ‘home,’” Prime Minister Justin Trudeau said in a statement. “Canada’s first ever National Housing Strategy is a once-in-a-generation vision to reduce homelessness, support community housing and shelter spaces, and address challenges of housing affordability.”

We took a major step forward on housing today, and we will continue to deliver initiatives that strengthen the middle class and lift more Canadians out of poverty. –The Right Honourable Prime Minister Justin Trudeau

The strategy was developed by the Government of Canada through consultations with Canadians who have encountered obstacles with respect to quality affordable housing, experts, stakeholders, as well as provincial, territorial and municipal governments.

“Our Government is establishing a federal leadership role in housing,” said Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for CMHC. “The National Housing Strategy will create a new generation of housing in Canada. It will promote diverse communities and will build housing that is sustainable, accessible, mixed-income and mixed-use that will be located near transit, work and public services.”

Part of the National Housing Strategy includes the $4-billion Canada Housing Benefit, which will be funded jointly by the federal, provincial, and territorial governments. Launching in 2020, the Canada Housing Benefit will put funds support into the hands of Canadians living in social housing, those on a wait-list and those living in private residences but struggling financially. The Canada Housing Benefit will deliver an average of $2,500 per year to approximately 300,000 households across Canada.

What does this mean for homebuyers? I spoke with Geoff Lee of GLM Mortgage Group to give you the full details.

“The new guidelines will require that all conventional mortgages (those with a down payment higher than 20%) will have to undergo stress testing. Stress testing means that the borrower would have to qualify at the greater of the five-year benchmark rate published by the Bank of Canada (currently at 4.89%) or the contractual mortgage rate +2% (5 year fixed at 3.19% +2%=5.19% qualifying rate).”

These changes effectively mean that a buyer’s borrowing power is directly impacted—up to a decrease of 25%. Let’s look at an example:

BUYING A HOME

When buying a home with these new guidelines, borrowing power is also restricted. Using the scenario of a dual income family making a combined annual income of $85,000 the borrowing amount would be:

Current Lending Guidelines

Qualifying at a rate of 3.34% with a 25-year amortization and the combined income of $85,000 annually, the couple can purchase a home at $560,000

New lending Guidelines

Qualifying at a rate of 5.34% (contract mortgage rate +2%) with a 25-year amortization and the combined annual income of $85,000 you would be able to purchase a home of only $455,000.

*For more information on the other guidelines, read GLM’s full article HERE

In the above scenario, it is a scary thought that you would qualify for 20-25% less than you would under today’s current lending guidelines. In our Fraser Valley markets, this is exceptionally significant when the average detached home price is well above $800,000.

What can be done? If you are thinking of buying, you may want to do so before these new guidelines take full effect in January of 2018. The market has maintained high median prices and low inventory over the past several months—and with the rate increases plus this new announcement- it is getting harder and harder to buy a home. Don’t wait- give me a call today and let’s meet to discuss how you can win! And remember, here at Young Real Estate Group, we get you more.

We are excited to have one of the sharpest Home Inspectors with us today! Say hello to Daniel Fedosenko of Mr. Home Inspector Ltd! Daniel has been in the industry for a number of years and has a wealth of knowledge when it comes to home inspections. From Vancouver to Hope and everywhere in between they are helping homeowners check off all the boxes when it comes to home inspections. So without further ado, take it away Danny!

I have worked with Alistair Young and his team for a number of years. At Mr. Home Inspector our goal is to:

Offer solutions to issues/challenges (not just reported problems)

Go above and beyond the call of duty, and

Provide exceptional customer service in the Lower Mainland (from Squamish to Hope).

Today, we wanted to cover the topic of Latent Defects. Latent defects are those which would not be revealed by any inquiry which a purchaser is in a position to make before entering the contract. Here are the top 10 Latent Defects that you may miss if you don’t have a proper home inspection done!

Bathing area moisture issues behind tile surrounds: water damage.

Pest infestation in attic, crawlspace, and or living areas: damage and air qulity issues can arise.

The summer heat has spilled over to the real estate market! This month the Fraser Valley remained in a Sellers Market.

Looking at the table above and seeing the ‘sales ratio’ you may ask how those numbers translate into a Seller’s Market. So we thought that this month we would dive into how we determine the market as a balanced, sellers, or buyers market.

First, what is a Sales Ratio? The Sales Ratio is the current inventory of homes that are selling. It is found by taking the number of sales and dividing

Examples:

 10% sales ratio=1 in 10 homes selling rate

33% sales ratip=1 in 3 homes selling rate

Make sense? We then take those ratios and compare them to benchmarks which determine if the market is balanced, favours buyers, or favours sellers.

A buyers market would have a sales ratio of 11% or less

A balanced market would have a sales ratio of 12-20%

A seller’s market would have a sales ratio of 20% or more

Looking at the stats in the table above, you can see that we are in a seller’s market–and have been for the past several months. If you would like to learn more about the stats for your specific area–or are interested in chatting about putting your home on the market get in touch with us today. We would love to meet with you and help you understand what the market is doing in your area!

A Market Rebound will make Buying More Expensive The Real Estate market slowed in Vancouver for the month of October-which is good news for First Time Home Buyers. However, there is the potential of a market rebound occurring, and prices going back up in the new year.

Segments of our Market are Increasing: Two segments have been growing in the real estate market and will continue to do so in 2017. These two segments are First Time Home Buyers and Baby Boomers looking to downsize. This increase in demand, coupled with a lack of supply, tends to bring higher prices.

Healthy Inventory of Homes Taper Off in the Winter: The supply of homes for sale is usually fairly low in January and February, making November and December a good time to pick up a new home. Buyers like a higher selection of homes and a lower chance of a bidding war.

The new year and holidays will be here before you know it! Take advantage of the less government intervention, lower pricing, and good supply available right now. This fall and winter could be your time to find the perfect home.